Room ACs' output falls 30% in July

Window or room air-conditioners output fell about a third in July this year against in the same month last year, the Index of Industrial Production data released on Thursday show.

The drop could be either due to the slowdown hitting demand or consumers changing preferences, as many companies have been selling ACs — window and split — at heavy discounts. Besides, AC makers had told Press Trust of India sales rose 20 per cent in the year ended May. Though the index figures relate to production, such divergence between sales and production in just two months is unlikley unless there are huge unsold stocks.

The data, which do not give figures for split ACs, show output of window ACs fell 30.8 per cent year-on-year in July.

Saurabh Baisakhia, LG India business head (AC), recently told PTI: “This has been a good year so far. Year-to-date, the sector has witnessed sales growth of around 20 per cent on an average. Although in some regions, we have seen even 50 per cent growth for us.”

Last year, about a million ACs were sold till May; the figure is expected to be up a little to 1.2 million till May this year.

Five-six years ago, window ACs were 70 per cent of the total sales. Now, an AC maker says, it is the other way round.

An analyst said though monsoon was over normal in July, any small dip in the mercury in parts of the country could not depress production of window ACs. In July, southwest monsoon was six per cent above normal all over India. Usually, the country gets around 288.9 mm rain in July but it got 307.5 mm this year, according to the India Meteorological Department.

India’s economic growth crashed to a decade low of five per cent in 2012-13. Any hope of an early recovery was dashed by the four-year low growth of 4.4 per cent in the first quarter of 2013-14. The index growth of a four-month high of 2.6 per cent in July provided a glimmer of hope but it was mainly led by electrical equipment in the capital goods segment.

The slowdown also hit telecom equipment, including mobile phones and accessories. Output fell 21.5 per cent year-on-year in July, the index data revealed.